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US govt asks Huawei and ZTE for more answers

Dumping allegations added to security questions

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US House of Representatives Intelligence Committee chair, congressman Mike Rogers, has turned yet another blowtorch onto Chinese vendors Huawei and ZTE, alleging that the Chinese government is subsidizing the price of kit they sell in America.

The committee has been investigating allegations of close ties between the Chinese government and both Huawei and ZTE since November and discussing the possible introduction of legislation that would deal with any related national-security threat.

Australian and New Zealand government officials have been in discussions with the panel’s investigators, in addition to representatives from the UK and Canadian markets, according to Committee panel chairman, US congressman Mike Rogers.

Earlier in this year in Australia, Huawei was excluded from bidding for any NBN Co contracts due to murky security concerns.

He has raised concerns that the Chinese vendor’s gear could be designed to make it easier to steal information, spy on US companies and government agencies or "establish the ability to do cyber attacks," Rogers told a Bloomberg Government conference in Washington.

Speculation includes claims that the Chinese government is subsidising Huawei and ZTE products in a bid to secure international market share. Rogers contended that the Chinese gear is subsidized "so it can be multiple times cheaper than any local competitor."

“This is going to be a huge problem that we’re going to have to get a handle on very quickly,” he said.

The committee aims to complete a classified and unclassified report by late US summer, covering any potential US security threat from the Chinese vendors.

Rogers said the findings would assist US telecommunication companies "to make the right decision and allow us to go forward with appropriate legislation as required."

Earlier this month, the panel issued letters to senior executives at Huawei and ZTE requesting detailed disclosure about Chinese government relations and their international pricing strategies. The letters,sent on June 12 gave the companies three weeks to respond.

The letters include requests for deeper detail about the companies’ history, strategy, connections to the government of China and the Chinese Communist Party, and whether they can truly act as private companies.

“I remain concerned about the national security threat posed by the potential expansion of Huawei and ZTE into our telecommunications infrastructure, We must get to the bottom of these issues before the companies have further access to our market. I trust both Huawei and ZTE will respond fully and completely in a timely fashion,” Rogers said. US House Intelligence Committee members also conducted face to face meetings with Huawei and ZTE execs in Hong Kong last month.